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Amazon’s Jeff Bezos Called to Testify on Third-Party Sellers’ Data

The U.S. House of Representatives Committee on the Judiciary is demanding from Amazon.com’s (AMZN) CEO Jeff Bezos to testify about claims that the online retailer is allegedly using data from third-party sellers to develop competing products.

In a letter by the U.S. Committee addressed to Bezos, it said that according to a Wall Street Journal report on April 23, Amazon employees used sensitive business data from third-party sellers on its platform to develop competing products. The report was based on interviews with over 20 former or current Amazon employees and the company’s internal documents.

“If these allegations are true, then Amazon exploited its role as the largest online marketplace in the U.S. to appropriate the sensitive commercial data of individual marketplace sellers and then used that data to compete directly with those sellers,” the Committee wrote in the letter.

Furthermore, the letter signed by seven members of the Committee alleged that “if the reporting in the Wall Street Journal article is accurate, then statements Amazon made to the Committee about the company’s business practices appear to be misleading, and possibly criminally false or perjurious”.

As part of an investigation into Amazon’s role in the digital marketplace, the Committee in September asked the online retailer to provide documents and communications related to its relationship with sellers, including its use of third-party sellers’ data.

“Amazon has not made an adequate production in response to this request, and – seven months after the original request – significant gaps remain,” according to the letter.

In addition, the Committee pointed out that the European Commission had already stated last year, that “Amazon appears to use competitively sensitive information – about marketplace sellers, their products and transactions on the marketplace”.

Following the publication of the letter on Friday, Amazon shares dropped 7.6% to close at $2,286.04.

Overall, Wall Street analysts have a bullish outlook on the stock. Out of the 40 analysts covering the stock in the last three months, 38 have Buys and the remainder are split between 1 Hold and 1 Sell adding up to a Strong Buy consensus rating. The $2,682.06 average price target implies 17% upside potential in the shares in the coming 12 months. (See Amazon stock analysis on TipRanks).

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Sharon Wrobel
Sharon Wrobel is a journalist and writer with two decades of experience covering financial news in the U.S., Europe and the Middle East. Her work has appeared in global publications including The Financial Times, Bloomberg and The Jerusalem Post.

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